Montauk Resort Ponzi Scheme Produces Second Guilty Plea

May 13 2014 | 9:46am ET

A second man has pleaded guilty in a $96 million Long Island Ponzi scheme.

Adam Manson’s plea to conspiracy to commit securities fraud comes two weeks after his brother-in-law, Brian Callahan, admitted to defrauding investors in his hedge fund. A substantial chunk of the stolen money went to prop up a struggling resort the men owned in Montauk, N.Y.

Manson admitted he helped keep Callahan’s fraud going by lying to an auditor and providing falsified documents. He faces up to five years in prison as part of a plea agreement, and has agreed to forfeit $3.9 million, as well as the remaining unsold units at Panoramic View, which could be worth more than $60 million.

“Adam Manson assisted his brother-in-law Brian Callahan in orchestrating one of the largest Ponzi schemes in Long Island history by lying to independent auditors and lending institutions,” Loretta Lynch, the U.S. Attorney in Brooklyn, said. “We hope that the guilty pleas provide some measure of relief and closure to the defrauded investors.”

Manson will be sentenced on Oct. 3, two months after Callahan, who faces up to 40 years in prison on securities and wire fraud charges.


In Depth

David Yarrow On Growing His Hedge Fund And Shooting The Animals And People Of Africa - As A Photographer

Jul 23 2014 | 6:44am ET

While he’s always been a photographer, recent expeditions to Iceland, Ethiopia...

Lifestyle

Einhorns Busts At WSOP, Finishes In 173rd

Jul 15 2014 | 10:48am ET

Greenlight Capital founder David Einhorn’s World Series of Poker won’t end at...

Guest Contributor

Common Risk Parity Misperceptions

Jul 16 2014 | 11:02am ET

Over the past few years, risk parity has become a component of most investors’...

 

Sponsored Content

    Northern Trust Helps Hedge Funds Navigate Derivatives Regulations

    Jul 8 2014 | 10:48am ET

    The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…

Publisher's Note